Book Industry TRENDS 2009 BookExpo America 2009 Working to create a more informed, efficient and empowered book industry

Agenda Introduction Methodology and Sources of Data Key Highlights and Findings Questions and Answers

Introduction

Methodology and Sources of Data

Key Highlights and Findings

Questions and Answers

Michael Healy Executive Director, Book Industry Study Group, Inc. Introduction

Michael Healy

Executive Director, Book Industry Study Group, Inc.

The book industry’s leading trade association for policy, standards and research Develops and maintains standards and best practices that support effective communications between all parts of the supply chain Conducts research and gathers data on issues affecting the whole book industry About BISG

The book industry’s leading trade association for policy, standards and research

Develops and maintains standards and best practices that support effective communications between all parts of the supply chain

Conducts research and gathers data on issues affecting the whole book industry

BISG’s mission Working to create a more informed, empowered and efficient book industry.

Working to create a more

informed, empowered and efficient

book industry.

How we accomplish our mission Providing a meeting point for the book industry Policy development Best working practices Consensus on industry issues Developing and maintaining standards Researching key issues affecting the industry

Providing a meeting point for the book industry

Policy development

Best working practices

Consensus on industry issues

Developing and maintaining standards

Researching key issues affecting the industry

Research and publications

Book Industry TRENDS 2009 The only complete view of today’s book-publishing industry Detailed tables, charts and analysis An up-to-date report that covers the entire industry, including the growing segment of small to mid-size publishers and top tier players

The only complete view of today’s book-publishing industry

Detailed tables, charts and analysis

An up-to-date report that covers the entire industry, including the growing segment of small to mid-size publishers and top tier players

TRENDS 2009: availability and pricing Available July 2009 Will be published in printed and electronic editions Single-use and multi-use PDFs will be available Free to most categories of BISG members

Available July 2009

Will be published in printed and electronic editions

Single-use and multi-use PDFs will be available

Free to most categories of BISG members

The only worldwide research and advisory firm serving the media and information industry Global team of 50+ Track publishing segments in the US, Europe and Asia Provide fact-based analysis of markets, companies, trends, technology Deliver actionable advice to CEOs and their teams in 300+ firms Offer subscription, membership and custom consulting services About Outsell

The only worldwide research and advisory firm serving the media and information industry

Global team of 50+

Track publishing segments in the US, Europe and Asia

Provide fact-based analysis of markets, companies, trends, technology

Deliver actionable advice to CEOs and their teams in 300+ firms

Offer subscription, membership and custom consulting services

Michael Healy: Book Industry Study Group Leigh Watson Healy: Outsell, Inc. Methodology and Sources of Data

Michael Healy: Book Industry Study Group

Leigh Watson Healy: Outsell, Inc.

TRENDS 2009 Objectives Provide comprehensive data on publishers’ sales Fully integrate small, medium and large publisher sales estimates in one data set Analyze book sales by updated category, channel and format definitions Deliver insight into book sales performance and projections

Provide comprehensive data on publishers’ sales

Fully integrate small, medium and large publisher sales estimates in one data set

Analyze book sales by updated category, channel and format definitions

Deliver insight into book sales performance and projections

Research Methodology Identify book publishing universe Collect sales data from publishers via online survey Interview large and midsize publishers Compile and analyze resulting data Incorporate secondary data sources, Outsell industry data and knowledge, and expert network insight Create projections and relate to past TRENDS data at various levels

Identify book publishing universe

Collect sales data from publishers via online survey

Interview large and midsize publishers

Compile and analyze resulting data

Incorporate secondary data sources, Outsell industry data and knowledge, and expert network insight

Create projections and relate to past TRENDS data at various levels

Book Publishing Universe From Bowker database: 130,477 active publishers in 2008 Number of active publishers increased 27% Total number of publishers continues to increase Virtually all of this increase occurs in the under-$50M/year small-publisher category

From Bowker database:

130,477 active publishers in 2008

Number of active publishers increased 27%

Total number of publishers continues to increase

Virtually all of this increase occurs in the under-$50M/year small-publisher category

Book Publishing’s Long Tail $12.7 Billion $27.6 Billion

Integrated view of long-tail and large publishers’ sales Analyzed survey data by expanded key segments Format Category Channel Foreign vs. domestic Frontlist/backlist Additional analysis to ensure consistency with past TRENDS estimates Fully Integrated Projections

Integrated view of long-tail and large publishers’ sales

Analyzed survey data by expanded key segments

Format

Category

Channel

Foreign vs. domestic

Frontlist/backlist

Additional analysis to ensure consistency with past TRENDS estimates

Leigh Watson Healy, Chief Analyst Outsell, Inc. Book Industry Trends

Leigh Watson Healy, Chief Analyst

Outsell, Inc.

Book Publishing $40.3 Billion in 2008

Growth Leaders and Laggards, 2008 Book Industry Growth – 1% 1%

Projected Growth, 2008-2010 Book Industry Growth – 2.1% CAGR 2.1% CAGR

All Book Publishing Segments 39,936 40,321 41,040 42,028 3,127 3,079 3,101 3,169 Publishers’ Net Dollar Sales ($M) 2007 to 2008 -1.5% 2008 to2009 0.7% 2009 to 2010 2.2% CAGR 2007-2010 0.4% CAGR 2008-2010 1.5% Publishers’ Unit Sales (M) 2007 to 2008 1.0% 2008 to 2009 1.8% 2009 to 2010 2.4% CAGR 2007-2010 1.7% CAGR 2008-2010 2.1%

Trade Book Publishing 15,048 14,734 14,812 15,135 2,282 2,238 2,248 2,294 Publishers’ Net Dollar Sales ($M) 2007 to 2008 -1.9% 2008 to 2009 0.5% 2009 to 2010 2.0% CAGR 2007-2010 0.2% CAGR 2008-2010 1.3% Publishers’ Unit Sales (M) 2007 to 2008 -2.1% 2008 to 2009 0.5% 2009 to 2010 2.2% CAGR 2007-2010 0.2% CAGR 2008-2010 1.4%

Adult Trade 11,392 11,125 11,214 11,483 1,381 1,348 1,361 1,393 Publishers’ Net Dollar Sales ($M) 2007 to 2008 -2.3% 2008 to 2009 0.9% 2009 to 2010 2.4% CAGR 2007-2010 0.3% CAGR 2008-2010 1.7% Publishers’ Unit Sales (M) 2007 to 2008 -2.3% 2008 to 2009 0.8% 2009 to 2010 2.4% CAGR 2007-2010 0.3% CAGR 2008-2010 1.6%

Juvenile Trade 3,657 3,609 3,598 3,652 901 889 888 901 Publishers’ Net Dollar Sales ($M) 2007 to 2008 -1.3% 2008 to 2009 -0.2% 2009 to 2010 1.5% CAGR 2007-2010 0.0% CAGR 2008-2010 0.7% Publishers’ Unit Sales (M) 2007 to 2008 -1.3% 2008 to 2009 -0.3% 2009 to 2010 1.5% CAGR 2007-2010 0.0% CAGR 2008-2010 0.6%

Religious Publishing 2,575 2,318 2,225 2,296 275 247 239 247 Publishers’ Net Dollar Sales ($M) 2007 to 2008 -10.0% 2008 to 2009 -3.2% 2009 to 2010 3.2% CAGR 2007-2010 -3.5% CAGR 2008-2010 0.0% Publishers’ Unit Sales (M) 2007 to 2008 -10.0% 2008 to 2009 -4.0% 2009 to 2010 -3.2% CAGR 2007-2010 -3.8% CAGR 2008-2010 -0.5%

Professional Publishing 8,358 8,696 8,961 9,116 246 256 265 269 Publishers’ Net Dollar Sales ($M) 2007 to 2008 4.0% 2008 to 2009 3.4% 2009 to 2010 1.7% CAGR 2007-2010 3.0% CAGR 2008-2010 2.5% Publishers’ Unit Sales (M) 2007 to 2008 4.0% 2008 to 2009 3.0% 2009 to 2010 1.7% CAGR 2007-2010 2.9% CAGR 2008-2010 2.4%

Scholarly Publishing 1,375 1,428 1,446 1,470 72 75 76 77 Publishers’ Net Dollar Sales ($M) 2007 to 2008 3.9% 2008 to 2009 1.7% 2009 to 2010 1.7% CAGR 2007-2010 2.4% CAGR 2008-2010 1.7% Publishers’ Unit Sales (M) 2007 to 2008 3.9% 2008 to 2009 1.3% 2009 to 2010 1.7% CAGR 2007-2010 2.3% CAGR 2008-2010 1.5%

Elhi Publishing 7,056 7,373 7,606 7,827 175 182 189 194 Publishers’ Net Dollar Sales ($M) 2007 to 2008 4.2% 2008 to 2009 3.5% 2009 to 2010 2.9% CAGR 2007-2010 3.5% CAGR 2008-2010 3.2% Publishers’ Unit Sales (M) 2007 to 2008 4.5% 2008 to 2009 3.2% 2009 to 2010 2.9% CAGR 2007-2010 3.5% CAGR 2008-2010 3.0%

College Publishing 5,524 5,772 5,990 6,184 78 81 84 87 Publishers’ Net Dollar Sales ($M) 2007 to 2008 4.5% 2008 to 2009 4.2% 2009 to 2010 3.2% CAGR 2007-2010 4.0% CAGR 2008-2010 3.7% Publishers’ Unit Sales (M) 2007 to 2008 4.5% 2008 to 2009 3.8% 2009 to 2010 3.2% CAGR 2007-2010 3.8% CAGR 2008-2010 3.5%

2008 sales data confirms “flat is the new up” Book publishing revenues will grow 1.8% in 2009 Sector performance will vary in 2009 Religious – decline less steep in 2009 Adult & juvenile trade – flat Scholarly – slight growth Professional, elhi and college – growth, but slowing All sectors will grow – moderately – in 2010 Conclusions

2008 sales data confirms “flat is the new up”

Book publishing revenues will grow 1.8% in 2009

Sector performance will vary in 2009

Religious – decline less steep in 2009

Adult & juvenile trade – flat

Scholarly – slight growth

Professional, elhi and college – growth, but slowing

All sectors will grow – moderately – in 2010

Publishing leaders expect return to growth in 2010 Recession as opportunity to become stronger: Act on organization, process and business model changes Develop strategic marketing muscle Keep customers at the core Engage the social network for editorial and marketing Understand how digital evolution is changing markets Essentials: innovation and focus on execution Looking Ahead

Publishing leaders expect return to growth in 2010

Recession as opportunity to become stronger:

Act on organization, process and business model changes

Develop strategic marketing muscle

Keep customers at the core

Engage the social network for editorial and marketing

Understand how digital evolution is changing markets

Essentials: innovation and focus on execution

Questions? Michael Healy [email_address] Leigh Watson Healy [email_address]